Alibaba Group (HK:9988) (NYSE:BABA) announced on Tuesday that its current chairman and CEO, Daniel Zhang, will be stepping down from his position after eight years of leading the e-commerce giant. Zhang will now take charge of the company’s cloud unit spin-off.
The company revealed that Eddie Yongming Wu, the chairman of Taobao and Tmall Group, will assume the role of CEO, while Joseph Tsai, currently the executive vice chair, will take over as chairman. Wu will also continue as the head of Taobao.
Meanwhile, Zhang will continue to serve as chairman and CEO of Alibaba’s Cloud Intelligence unit. This move comes as Alibaba plans to spin off and potentially list six of its major units within the next year.
“This is the opportune moment for me to transition, considering the significance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off,” stated Zhang in a press release issued by Alibaba.
Zhang initially joined Taobao as the chief financial officer in 2013 and later rose to lead the e-commerce hub Tmall. In 2015, he was appointed as CEO of Alibaba and was subsequently named chairman by founder Jack Ma in 2019.
The change in top leadership follows Alibaba’s recent announcement of its intention to split into six independent units, with the main company transforming into a holding entity. Shareholders have warmly welcomed this decision, as they believe the spin-off of its most lucrative businesses will unlock greater value. Moreover, it is seen as an attempt to satisfy Chinese regulators who have been scrutinizing major tech firms in the country for potential monopolistic practices.
Alibaba’s cloud unit has been grappling with a slowdown in sales amid intensified competition from rivals like Tencent Holdings Ltd (HK:0700) and weakening global demand.
During the midday break on Tuesday, Alibaba’s Hong Kong shares experienced a 1.6% decline, while the broader Hang Seng index dropped over 1%.